Where are you losing the most to employee theft? Is it cash through the point of sale, bogus invoices, or fraudulent discounts? If you’re like most retailer stores, it’s more than likely a little bit of each. One area that is so often overlooked is our back doors. If not properly controlled, you can lose tens of thousands of dollars’ worth of merchandise before it even hits your sales floor.
Just this past year, I worked a case in one of my high shrink stores. The managers were reported huge losses in electronics items and hunting accessories. After an investigation was conducted, we were able to determine that the product had never made it to the shelves. After a few days of surveillance, it was clear that a handful of receiving associates were operating their own small business. Product was simply taken off the truck and taken right out the back doors.
Just a few months ago another store was missing approximately 10,000 units of ammunition. We tracked this shipment from our warehouse, where we had video of it leaving the dock, as well as video of the merchandise being unloaded at the store. Video also showed a receiving employee wheel it out the back door on a pallet and load it into his personal vehicle.
I could sit here for hours recalling case after case, where employees exploited physical security failures around our back doors. In just about every single case, there was a violation of our company’s policy that led to the associate being able to steal the product. As managers, you have to take ownership of this area, or else it will bleed you dry.
First, ensure that only managers have a key to the back door and that a manager is the only one using those keys! All too often, I’ve seen managers give their keys to a “trusted” associate, in an attempt to delegate tasks, only to have that associate rob them blind. Your managers are key holders for a reason; and that trust should only stay with them.
When manager does open the back door, they should stay at the doors. I’ve had cases where a manager would step out of the warehouse for a minute with the door open, and an employee would run product out. If the door is open, the manager stays posted until the doors can be locked. This is a non-negotiable item for my company. Unsecured and unattended back doors can get a manager a coaching in their file. It’s that serious.
Plenty of stores don’t have the luxury of a compactor and have to take the trash out to an open-top dumpster several times a day. This is a great time for employees to stage product inside of trash bags. To prevent this, you should mandate that all boxes be broken down prior to the door being opened. In addition, use clear garbage bags instead of solid black. This lets you see what each bag contains before it goes outside.
Securing the back door, to me, is just as important as any other physical security measure used in the store. I can use all the EAS devices and anti-theft tools in the world, but they won’t be effective if the product is flowing out of the back door. This is one of the biggest areas of potential loss for any store and I can guarantee that if you have any weaknesses, or lapses in policy, a dishonest employee will find them and they will exploit them. Do yourself a favor and make sure your back door policy is locked down this holiday season.
